Which of the following are theories meant to explain "Why Price Levels are Lower in Poorer Countries"?
A)only Bhagwati-Kravis-Lipsey
B)only Balassa-Samuelson
C)only Goldberg-Knetter
D)Bhagwati-Kravis-Lipsey and Balassa-Samuelson
E)Bhagwati-Kravis-Lipsey and Goldberg-Knetter

Question

Quizplus · Accepted Answer

The Bhagwati-Kravis-Lipsey and Balassa-Samuelson theories both address why price levels are lower in poorer countries. The Balassa-Samuelson effect explains it through productivity differences, while the Bhagwati-Kravis-Lipsey hypothesis focuses on trade and non-tradable goods.

Which of the Following Are Theories Meant to Explain "Why